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THE  BENEFIT  OF  THE  HEPBURN 
LAW  TO  THE  BANKER,  BROKER, 
SHIPPER,    AND    THE   PUBLIC 


ADDRESS  DELIVERED  BEFORE  THE 
FITCHBURG  BOARD  OF  TRADE 
WEDNESDAY  EVENING,  APRIL 
BY     CHARLES    STEDMAJS    KANj 


in  2007  with  funding  from 
Microsoft  Corporation 


PUBLISHED  BY  THE 

AUTHORS'  PUBLISHING  ASSOCIATION  (Inc.) 
No.  53    STATE   STREET.    BOSTON,    MASS. 


http://www.archive.org/details/benefitofhepburnOOhankrich 


THE  BENEFIT  OF  THE  HEPBURN 
LAW  TO  THE  BANKER,  BROKER, 
SHIPPER,    AND    THE   PUBLIC 


CHESTNUT  HILL.  MASS.  44  CIRCUIT  ROAD 

Here's  thinking  of  you. 

CHARLES  STEDMAN  HANKS 

PLEASE    ACKNOWLEDGE    RECEIPT    BY    POSTAL 
OF  THE     '*^    X 


/  '•>^   THE      "      "^ 

t    UNIVERSITY  I 


PUBLISHED  BY  THE 

AUTHORS'  PUBLISHING  ASSOCIATION  (Inc.) 
No.  53    STATE   STREET,    BOSTON.    MASS. 


THE  BENEFIT  OF  THE  HEPBURN 
LAW  TO  THE  BANKER,  BROKER, 
SHIPPER,    AND    THE   PUBLIC 


ADDRESS  DELIVERED  BEFORE  THE 
FITCHBURG  BOARD  OF  TRADE 
WEDNESDAY  EVENING,  APRIL  3, 
BY     CHARLES    STEDMAN     HANKS 


PRINTED  BY  REQUEST 


PUBLISHED  BY  THE 


AUTHORS'  PUBLISHING  ASSOCIATION  (Inc.) 
No.  53    STATE   STREET,    BOSTON.    MASS. 


Copyright,  1907 
By  Charles  Stedman  Hanka 


THE  BENEFIT  OF  THE  HEPBURN  LAW 

TO  THE  BANKER,  BROKER,  SHIPPER, 

AND  THE  PUBLIC 


When  Congress  passed  the  Hepburn  bill,  it 
knew  that  the  time  had  come  when  the  govern- 
ment must  either  control  the  railroads  or  the 
railroads  would  control  the  government.  Ex- 
perience, too,  had  proved  that  there  must  be 
a  closer  mutuality  of  interest  between  the  rail- 
roads and  the  shippers  if  the  covert  and  destruc- 
tive warfare  which  was  being  carried  on  between 
our  different  railroad  systems  was  to  be  pre- 
vented,— a  condition  of  affairs  which  had  been 
brought  about  by  secret  rates  and  the  rebate 
system. 

This  Hepburn  bill  which,  on  the  28th  of 
August,  1906,  became  a  law,  will  prove  to  be 
an  epoch-making  law,  and,  in  my  judgment,  it  is 
as  important  a  law  as  the  laws  which  were  passed 
when  Alexander  Hamilton  devised  his  plan  of 
a  national    credit.      Before    the    Hepburn    bill 


1G0614 


became  a  law,  many  railroad  officials,  ignoring 
the  fact  that  railroads  are  public  service  cor- 
porations, had  forgotten  that  the  people  had 
rights  and  had  charged  unreasonable  rates,  and, 
although  a  shipper  could  file,  with  the  Inter- 
state Commerce  Commission,  a  complaint  that 
a  rate  was  unfair  and  unreasonable,  the  Com- 
mission had  no  power  to  enforce  its  findings; 
and,  as  the  people  were  the  ones  who  suffered, 
government  regulation  consequently  became  im- 
perative. 

Soon  after  the  bill  became  a  law,  a  promi- 
nent railroad  president  made  the  statement  that 
he  intended  to  do  what  he  could  to  prevent  the 
pernicious  practices,  which  have  heretofore  ex- 
isted, and  the  other  day  another  prominent  rail- 
road man  said  that  he  believes  the  Hepburn 
law  is  for  the  best  interests  of  the  railroads. 
In  other  words,  the  attitude  of  railroad  officials 
is  already  changing.  When  the  bill  was  before 
Congress,  the  railroads  used  every  influence  to 
prevent  its  becoming  a  law.  Now  they  are 
beginning  to  believe  that  what  the  government 
was  contending  for  is  a  good  business  propo- 
sition. 

The  passage  of  the  bill,  it  was  hoped,  would 


bring'  about  harmonious  and  progressive  action 
among  the  railroads  in  coping  with  the  problem 
to  be  solved  in  the  transportation  business,  as 
up  to  this  time  railroad  officials  had  been  unable 
to  agree  among  themselves  upon  any  general 
railroad  policy.  In  order  to  have  some  definite 
policy  for  carrying  on  the  transportation  business 
of  this  country  and  also  to  bring  about  more 
economy  of  operation,  the  building  of  new  lines, 
better  equipment  facilities  for  the  handling  of 
traffic  and  to  eliminate  parasitic  corporations 
whose  operations  were  affecting  the  earnings  of 
other  roads  and  to  prevent  discriminations,  re- 
bates, and  rate  wars,  the  Hepburn  law  has  made 
certain  rules  and  regulations  which  the  railroads 
must  now  follow.  Many  of  the  provisions  of 
this  law  were  drafted  for  the  benefit  of  the  public, 
and  the  public  is  now  wondering  what  effect  the 
law  is  to  have  upon  the  progress  and  prosperity 
of  our  country.  In  considering  the  law,  we  must 
keep  in  mind: — 

Firstj  that  the  government  has  now  a  voice  in 
regulating  the  revenues  of  the  railroads. 

Second,  that  the  Interstate  Commerce  Com- 
mission has  practically  been  given  executive, 
administrative,  and  judicial  powers. 


Third,  that  Congress,  when  it  prescribed  in  a 
general  way  the  rules  and  regulations  for  con- 
ducting the  transportation  business  of  this  coun- 
try, made  such  rules  and  regulations  that  the 
shipper  need  no  longer  have  any  lack  of  confi- 
dence that  he  will  be  able  to  get  the  rights  which 
belong  to  him. 

Fourth,  that  Congress,  when  it  made  the  Inter- 
state Commerce  Commission  the  arbitrator  to 
decide  all  questions  of  railroad  transportation, 
passed  a  law  which  makes  it  impossible  for  any 
combination  of  interests  to  get  any  privileges 
which  the  smallest  shipper  cannot  now  obtain. 

Under  this  law  the  fundamental  remedy  for 
any  injustice  to  a  shipper  by  a  railroad  and  for 
any  discrimination  against  a  small  railroad  cor- 
poration by  some  large  railroad  system  lies  in  the 
power  of  the  Interstate  Commerce  Commission 
to  regulate  rates,  Section  1  of  the  Act  saying  : 

All  charges  made  for  any  service  rendered 
or  to  be  rendered  in  the  transportation  of  pas- 
sengers or  property  as  aforesaid,  or  in  connection 
therewith,  shall  be  just  and  reasonable,  and  every 
unjust  and  unreasonable  charge  for  such  service 
or  any  part  thereof  is  prohibited  and  declared  to 
be  unlawful. 


Section  15  saying, 

The  Commission  ...  is  authorized  and  em- 
powered, and  it  shall  be  its  duty  ...  to  determine 
and  prescribe  what  will  be  the  just  and  reasonable 
rate  or  rates,  charge  or  charges,  to  be  thereafter 
observed  as  the  maximum  rate  to  be  charged. 

Keeping  in  mind,  therefore,  these  two  pro- 
visions of  the  Act  as  the  governing  clauses  of  the 
law,  it  is  easy  to  see  that  we  can  find  out  what 
the  remedies  are  for  many  of  the  evils  and 
faults  which  had  previously  existed  in  railroad 
operations  by  mathematical  calculation,  as  the 
Interstate  Commerce  Commission,  in  determin- 
ing what  are  fair  and  reasonable  rates,  is  obliged 
to  take  into  consideration  not  only  the  details 
of  all  receipts  and  disbursements  of  a  railroad, 
but  its  capitalization  and  financial  standing,  if 
it  is  to  make  a  maximum  rate  based  upon  the 
real  conditions  under  which  the  road  is  being 
operated. 

In  order  to  understand  the  real  railroad  situa- 
tion, the  Interstate  Commerce  Commission  has 
been  given  the  right,  in  the  20th  Section  of  the 
Act,  to  require  every  railroad  to  keep  its  accounts 
and  memoranda  according  to  such  form  as  it  shall 
prescribe  or  approve,  and  the  law  also  provides 


8 


that  every  railroad  corporation  shall  annually 
file  a  sworn  report  showing  in  detail  its  busi- 
ness, its  capitalization,  and  its  indebtedness.  If, 
therefore,  the  provisions  of  the  law  are  enforced, 
there  will  no  longer  be  any  sensationalism  in 
the  management  of  our  railroads,  and  the  roads 
will  be  operated  according  to  the  rules  of  com- 
mercialism, for  the  reason  that  the  power  to 
regulate  rates  has  been  transferred  from  the 
railroads  to  the  government,  and  the  rates  must 
now  be  based  upon  commercial  conditions  esti- 
mated at  their  proper  values.  Further,  if  the 
reports  of  the  railroads  are  properly  tabulated 
by  the  statistical  division  of  the  Commission, 
the  shipper  will  now  need  no  more  intelligence 
in  understanding  with  substantial  accuracy  what 
a  road  should  earn  and  approximately  what  a 
rate  should  be  than  he  now  requires  in  carrying 
on  his  own  business. 

What  this  power  to  regulate  rates  means  has 
been  stated  by  one  of  the  ablest  railroad  attorneys 
of  this  country  in  an  article  in  one  of  our  maga- 
zines in  which  he  says,  '^  It  is  a  matter  of  common 
knowledge  that  the  rates  charged  by  the  railroads 
of  this  country  affect  all  classes  of  our  community, 
that  they  determine  very  largely  the* outcome  of 


9 


all  private  enterprises,  that  upon  them  hinges 
only  too  often  the  national  well-being,  if  not  the 
very  existence  of  our  villages,  towns,  and  cities, 
and  of  our  seaboards  and  large  sections  of  our 
country/' 

When,  however,  this  power  to  regulate  rates 
was  transferred  by  the  Hepburn  law  from  the 
railroads  to  the  government,  an  equally  prominent 
railroad  man  said,  "The  act  is  revengeful  and 
punitive,  is  drawn  either  in  ignorance  or  prejudice, 
that  it  has  less  thought  of  fairness  to  the  rail- 
roads or  the  interests  of  the  public  than  to  con- 
centrate tremendous  power  in  the  general  gov- 
ernment, not  necessary  in  the  elimination  of 
the  abuses  complained  of  and  which,  if  constitu- 
tional, gives  power  to  disarrange  the  established 
market  to  an  extent  that,  if  exercised,  will 
produce  little  short  of  revolution,  and  that  the 
power  to  favor  one  section  of  the  country  and 
punish  another  is  too  great  to  intrust  to  any  set 
of  men/'  As  the  power  given  to  the  Interstate 
Commerce  Commission  is  restricted  to  making 
fair  and  reasonable  rates,  it  does  not  have  the 
power  to  disarrange  the  established  market  of 
this  country,  other  than  those  hot-house  growths 
which  have   been  brought   about  by  combiua- 


10 


tions  of  railroad  interests.  Further,  there  is 
always  an  appeal  from  any  decision  of  the 
Commission,  and  any  one  with  a  grievance, 
whether  he  be  a  shipper  or  a  railroad  corporation, 
can  have  ''his  day  in  court."  Further,  one  of 
the  purposes  of  the  Hepburn  bill  was  to  prevent 
the  railroads  changing  the  natural  markets  of  this 
country  by  making  preferential  rates,  particularly 
on  lines  running  from  the  interior  to  the  seaboard, 
which  resulted  in  naturally  inferior  ports  being 
put  on  a  par  with  the  best  ports  and  naturally 
inferior  routes  on  a  par  with  the  best  routes, 
all  of  which  is  prejudicial  both  to  the  producer 
and  to  the  shipper,  and  has  changed  the  estab- 
lished markets  of  this  country. 

The  power  given  to  the  Interstate  Commerce 
Commission  is  a  very  great  one.  If,  however, 
the  different  factors  interested  in  this  transpor- 
tation problem  work  in  unison  with  the  under- 
lying thought  that  all  rates  must  be  just  and 
reasonable,  the  Commission  will  have  less  occa- 
sion to  use  its  powers  or  to  regulate  rates  than 
the  merchandise  clerk  does  in  marking  the  prices 
at  which  the  merchandise^of  his  firm  is  to  be 
sold,  for  the  reason  that  ?the  ^Commission  is 
limited  in  the  exercise  of  its  powers  to  deciding 


11 


cases  where  the  rates  are  unfair  and  unreasonable. 
The  important  fact,  however,  which  the  people 
of  this  country  do  not  yet  seem  to  realize  the 
significance  of,  is  that  any  one  can  now  initiate 
proceedings  with  the  Commission  which  will 
necessitate  fair  and  reasonable  rates  being 
made, — rates  which  are  no  longer  to  be  based 
on  guess,  but  on  facts,  figures,  and  conditions, 
and,  as  railroad  operations  are  now  to  be  shown 
with  such  completeness  that  the  ability  to  de- 
termine what  the  statistical  reports  mean  will 
no  longer  be  limited  to  the  expert,  the  shipper 
can  now  determine  for  himself  what  are  ap- 
proximately fair  and  reasonable  rates,  provided, 
however,  the  reports  of  the  railroads  to  the 
Commission  are  properly  made  and  are  properly 
tabulated  by  its  statistical  division. 

The  Statistical  Reports. 

The  statistical  reports  of  the  Interstate 
Commerce  Commission  are,  therefore,  one  of  the 
most  important  elements  in  getting  fair  and 
reasonable  rates,  and  they  should  be  so  tabu- 
lated that  the  shipper  can  understand  them 
as  easily  as  he  now  tells  from  his  railway  guide 


12 


the  movements  of  passenger  trains.  Until  these 
statistics  are  a  correct  tabulation  of  the  returns 
of  the  railroads,  the  shipper  has  no  real  basis 
upon  which  a  complaint  can  be  made.  If  these 
statistics  are  to  be  properly  tabulated,  the 
Interstate  Commerce  Commission  must  give 
up  using  the  Merger  Rule.  By  this  rule  which 
the  Commission  has  adopted,  a  road  under  the 
control  of  another  road  by  a  lease  of  long  dura- 
tion or  by  the  ownership  of  the  majority  of  its 
stock  is  not  obliged  to  make  a  report  to  the 
Commission.  The  identity,  therefore,  of  the 
controlled  road  disappears,  and  its  name  is 
dropped  from  the  Commission's  list  of  railroads, 
although  it  still  has  a  legal  entity  as  a  railroad 
corporation,  and  its  bonds  are  still  in  the  hands 
of  the  public. 

Mr.  G.  W.  R.  Harriman,  who  has  made  an 
examination  of  the  statistical  reports  of  the  In- 
terstate Commerce  Commission  for  me,  has 
claimed  that,  by  the  application  of  this  Merger 
Rule  to  the  capitalization  of  the  railroads,  the 
value  of  the  statistical  reports  is  vitiated. 
Five  months  after  this  criticism  was  made,  an 
editorial  appeared  in  the  March  15th  number  of 
the  Railway  Age  as  follows: — 


13 

In  his  annual  report  for  the  year  1905,  just  now 
being  distributed,  Professor  Henry  C.  Adams, 
Statistician  to  the  Interstate  Commerce  Com- 
mission, announced  that  he  has  in  progress  a  de- 
tailed investigation  of  the  duplication  of  the 
railway  capitalization  which,  when  completed, 
will  enable  him  ^'to  make  an  absolutely  correct 
statement  of  the  amount  of  railway  capital, 
which  in  fact,  under  the  existing  organization  of 
railway  properties,  may  claim  support  from 
railway  earnings."  This  is  a  somewhat  tardy 
step  toward  the  elimination  of  a  needless  error 
which  has  done  much  to  mislead  the  general 
public  and  to  create  sentiment  adverse  to  the 
great  industry  with  which  Professor  Adams's 
official  duties  are  connected.  The  need  of  it 
is  shown  by  the  statement  in  the  report  that 
the  total  capitalization  on  June  30,  1905,  was 
$13,805,258,121,  or  $65,926  per  mile,  a  statement 
which,  it  is  admitted,  ^' makes  no  deduction  of 
stocks  and  bonds  owned  by  railways  in  their 
corporate  capacity,  and,  to  the  extent  that  such 
deductions  are  proper,  overstates  the  capital."  .  .  . 
The  true  capitalization,  which  cannot  be  obtained 
from  the  report  except  by  compilation,  was 
$11,167,105,992,  and  the  average  per  mile  of 
line  was  $53,327,  a  difference  of  nearly  twenty 
per  cent. 

In  another  issue  of  this  same  railroad  publication 
was  the  following  statement,  which  was  appar- 


14 


ently  the  result  of  an  interview  with  the  Statis- 
tician of  the  Commission,  namely: — 

It  is  understood  that  this  Merger  Rule  is  not 
to  be  published  as  it  has  been,  and  that  in  the  new 
collection  of  statistics  which  begin  under  the 
Hepburn  law  Professor  Adams  will  accept  the 
amendment  of  Mr.  Harriman  in  this  and  other 
particulars. 

These,  together  with  other  admissions  which 
have  been  made  in  reference  to  other  criticisms 
of  Mr.  Harriman,  concerning  the  statistical  re- 
ports of  the  Commission,  have  already  proved 
that  eighty  per  cent,  of  his  criticisms  were  proper 
ones,  and  it  will  only  be  a  question  of  time 
when  all  of  his  criticisms  will  be  admitted. 

If  a  correct  tabulation  of  the  reports  of  the 
railroads  is  made,  it  will  probably  show  that  a 
majority  of  the  railroads  of  this  country  are 
being  operated  according  to  business  princi- 
ples. These  railroads,  therefore,  should  not  be 
considered  with  those  roads  which  are  being  dis- 
credited in  the  way  in  which  the  public  is  now 
discrediting  the  management  and  financial  oper- 
ations of  all  railroads.  Further,  an  analysis 
from,  a  proper  statistical  exhibit  would  locate 
any  over-capitalization,  and  give  absolutely  the 


15 


place  where  the  remedy  should  be  applied.  In 
fact,  the  correction  of  any  over-capitalization 
must  start  with  the  statistical  reports,  for  the 
reason  that  prior  to  the  passage  of  the  Hepburn 
bill  the  traffic  manager  made  the  rate  accord- 
ing to  "what  the  traffic  would  bear,''  and  did 
not  take  into  consideration  the  capitalization 
of  his  road.  The  Commission,  however,  in  regu- 
lating a  rate  is  obliged  to  take  into  consideration 
this  capitalization,  as  it  is  one  of  the  elements 
in  determining  what  a  just  and  reasonable 
rate  should  be,  because  in  making  a  just  and 
reasonable  rate,  it  must  know  what  is  a  just 
and  reasonable  capitalization. 


The  Interstate  Commerce  Commission. 

As  the  Interstate  Commerce  Commission  has 
now  the  power  and  a  dignity  practically  equal 
to  that  of  the  Supreme  Court,  it  should  be  so 
constituted  that  any  person  and  any  railroad 
corporation  can,  without  hesitation,  appeal  to  its 
wisdom,  and  expect  to  receive  just  decisions. 
With  the  many  mandatory  provisions  of  the 
Hepburn  law  as  a  guide,  there  need  be  no  am- 
biguity in  interpreting  the  meaning  of  the  law, 


16 


and  there  should  be  no  loss  of  time  by  the  Com- 
mission in  making  its  decisions^  as  every  ship- 
per, under  the  provisions  of  the  law,  has  the 
right  to  expect  a  decision  within  sixty  days 
after  his  complaint  is  made.  These  decisions 
of  the  Commission  must  necessarily,  be  largely 
based  on  its  statistical  reports,  and  the  estimate 
of  the  Statistician  that  it  will  take  two  years  to 
formulate  a  proper  form  of  books  for  the  rail- 
roads to  keep,  is  too  long  a  time  to  hold  the 
situation  in  its  present  unsettled  condition. 
Many  things  could  be  done  at  once  to  relieve 
the  present  situation.  The  distrust  which  the 
public  now  has  against  all  railroad  corpora- 
tions could  be  eliminated  from  a  majority  of 
these  corporations  if  the  Commission  should  put 
in  classes  by  themselves  those  railroads  which, 
by  their  reports  in  the  past,  showed  that  they 
complied  with  the  request  of  the  Commission, 
and  which  now  show  that  they  are  complying 
with  the  provision  and  the  purport  of  the  Hep- 
burn law.  How  these  railroads  can  be  classi- 
fied Mr.  Harriman  has  indicated  to  the  Com- 
mission. If  his  suggestions  are  followed,  the 
stocks  and  bonds  of  most  of  our  railroads  will 
soon  have  a  more  stable  value. 


Although  the  Commission  has  been  given  ex-  "  "— -— ^ 
ecutive,  administrative,  and  judicial  powers  in 
interpreting  the  Hepburn  law,  and  although  the 
Commission  should  be  aggressive  in  protecting 
the  rights  of  all  persons  and  all  corporations,  it 
should  only  initiate  proceedings  as  a  last  resort, 
as  its  most  valuable  function,  as  a  branch  of  the 
government,  is  in  acting  as  arbitrator  on  the 
broad  lines  of  co-operation  between  the  public, 
the  shipper,  and  the  railroads.  If  this  is  done, 
it  will  at  once  give  a  feeling  of  security  to  inves- 
tors, a  guarantee  of  stability  and  uniformity  of 
rates  to  shippers,  and  create  a  more  harmonious 
feeling  between  the  different  railroad  systems 
in  coping  with  the  problem  to  be  solved  in  the 
transportation  of  persons  and  commodities. 

Every  question  which  the  Commission  has  to 
decide  is  an  economic  one  which  can  be  reduced 
to  a  specific  problem,  can  be  defined  in  writing, 
is  susceptible  of  proof,  and  can  be  solved  without 
jeopardizing  any  interest,  if  the  roads  are  hon- 
estly financed  and  managed  according  to  busi- 
ness ethics.  In  the  Nebraska  maximum  rate 
case,  where  the  question  of  how  to  arrive  at  a  just 
and  reasonable  rate  was  at  issue,  the  Court  said, 
"  In  order  to  ascertain  that  [a  just  and  reasonable 


18 


rate],  the  value  and  the  original  eost  of  construc- 
tion, the  amount  expended  in  permanent  im- 
provement, the  amount  and  market  value  of  its 
[the  road's]  stocks  and  bonds,  the  present  as 
compared  with  the  original  cost  of  construction, 
the  probable  earning  capacity  of  the  plant  under 
particular  rates  prescribed  by  statute,  and  the 
sum  to  meet  operating  expenses  are  all  matters 
for  consideration,  and  are  to  be  given  such  weight 
as  may  be  just  and  right  in  such  a  case/' 

The  Parties  in  Interest. 

With  the  Hepburn  law  stating  definitely  the 
way  in  which  transportation  shall  be  conducted, 
with  the  Interstate  Commerce  Commission  hav- 
ing the  power  to  enforce  these  mandatory  rules 
and  regulations  which  are  now  to  govern  all 
railroad  operations,  with  the  certainty  which 
every  shipper  now  has  .that  the  rates  will  be 
fair  and  reasonable,  there  are  obviously  nine 
distinct  factors  which  will  be  effected  in  the 
solution  of  any  transportation  problem  which 
has  to  do  with  the  reasonableness  and  the 
justice  of  any  rate.     These  factors  are: — 

First. — The  railroad  corporations. 

Second. — The  general  shipper. 


19 


Third, — The  special  shipper  who  controls 
such  transpartation  devices  as  private  cars, 
spur  tracks,  etc. 

Fourth. — The  private  car  companies. 

Fifth. — The  express  companies. 

Sixth. — Our  legislators. 

Seventh. — Our  bankers  and  brokers  who  deal 
in  railroad  securities. 

Eighth. — The  investors  in  railroad  securities. 

Ninth. — The  public,  who  in  the  last  analysis 
pays  all  the  bills. 

Each  can  demand  that  the  Commission  shall 
give  a  decision  in  reference  to  the  reasonableness 
of  any  rate,  and  any  one  of  these  different  factors 
can  make  a  move  on  the  checkerboard  which 
will  affect  the  interests  of  all  the  others.  It  is 
this  phase  of  the  law,  that  any  one  can  now 
start  the  ball  rolling,  which  the  public  is  now 
only  beginning  to  realize  the  significance  of. 
Here,  again,  the  statistical  reports  of  the  Com- 
mission become  an  important  element  which 
every  factor  has  to  consider,  for,  unless  these 
statistics  are  properly  tabulated,  no  one  can 
know  what  will  be  uncovered.  Correct  statistics 
are  consequently  as  important  to  the  railroads 
as  to  the  banker,  the  stock  broker,  the  shipper, 


20 


or  the  investor  in  railroad  securities,  for  the 
complaint  of  a  small  shipper,  if  sustained  by 
the  Commission,  is  apt  to  become  of  vital  im- 
portance to  some  railroad  corporation,  some 
banker  or  broker,  or  some  investor  in  railroad 
securities,  as  the  decision  of  the  Commission 
may  affect  some  large  business  proposition 
which  is  being  formulated. 

Up  to  this  time  the  public  has  only  heard  the 
railroad  side  of  the  question,  and  has  not  taken 
into  consideration  the  fact  that,  when  any 
transportation  problem  now  comes  up  for 
decision  before  the  Interstate  Commerce  Com- 
mission, every  one  of  these  factors  has  some  in- 
terest at  stake,  and,  before  any  correct  solution 
of  the  problem  can  be  arrived  at,  each  has  a 
right  to  be  heard  and  to  contribute  such  facts 
as  he  can  towards  the  solution  of  the  problem. 
Our  bankers,  brokers,  investors,  shippers,  and 
the  public  are  only  now  just  beginning  to  realize 
the  broad,  range  of  the  Hepburn  law,  and,  now 
that  they  are  waking  up  to  the  fact  that  this 
law  affects  their  own  business  as  much  as  it 
does  the  railroads,  they  are  beginning  to  see  the 
importance  of  having  reports  in  detail  filed  by 
the  railroads,  and  of  having  these  reports  cor- 


21 


rectly  tabulated,  so  that  the  law  can  be  enforced 
with  a  proper  understanding  of  the  whole  ques- 
tion. 

Our  Bankers  and  Brokers. 

Take,  for  example,  the  effect  of  the  Hepburn 
law  as  it  applies  to  our  stock  brokers.  Under 
the  old  law  a  stock  broker  might  know  that 
the  freight  rates  on  a  particular  road  were 
excessive,  yet,  knowing  that  the  government  had 
no  power  to  reduce  the  rates,  this  broker  would 
be  safe  in  assuming  that  these  rates  would  be 
kept  high  enough  to  support  the  stock  which 
the  road  was  putting  upon  the  market,  although 
he  knew  that  it  was  watered  stock.  Under  the 
new  law,  although  he  may  be  on  the  inside 
and  may  know  that  watered  stock  is  being  put 
on  the  market,  yet,  knowing  that  the  Interstate 
Commerce  Commission  may  at  any  time  lower 
the  rates,  this  special  knowledge  becomes  a  factor 
which  he  is  now  obliged  to  consider  in  a  different 
way  when  he  underwrites  a  block  of  this  stock, 
because  he  now  realizes  that  some  shipper  may 
at  any  time  file  a  complaint  with  the  Commission, 
and  the  rate  be  reduced.  In  other  words,  under 
the  old   law  the  stock  broker  could  work  with 


22 


the  railroad.  Now  he  must  base  his  business 
judgment  on  the  facts  as  they  exist,  and  the 
first  question  which  he  will  ask  himself  is  whether 
the  rates  are  unreasonable  and  therefore  liable 
to  be  lowered  by  the  Interstate  Commerce 
Commission.  Under  the  old  law  he  studied 
such  reports  as  the  railroads  saw  fit  to  publish. 
Now  he  has  to  study  the  statistical  reports  of 
the  Commission,  to  determine  what  his  policy 
will  be,  as  the  data  given  in  these  reports  point 
to  certain  conclusions  which  the  Interstate 
Commerce  Commission  is  bound  to  follow  in 
making  its  decisions.  Formerly  the  policy  of 
the  railroads  was  the  determining  element. 
Now  it  is  the  attitude  of  the  Interstate  Commerce 
Commission. 

The  Shipper. 

Take  also  the  effect  of  the  law  as  it  applies 
to  our  shippers.  In  considering  the  law  from 
the  shipper's  view-point  we  must  keep  in  mind 
first  that  uniformity  is  one  of  the  fundamental 
principles  underlying  the  law,  not  only  in  refer- 
ence to  the  book-keeping  of  the  railroads  but 
also    in    reference   to   railroad    operations.      A 


23 


standardization  of  railroad  operations,  though 
not  specifically  provided  for  in  the  Act,  is,  con- 
sequently, a  necessary  sequence  in  carrying  out 
the  provisions  of  Section  2,  which  says, — 

That  if  any  common  carrier  subject  to  the  pro- 
visions of  this  Act  shall  directly  or  indirectly 
by  any  special  rate,  rebate,  drawback,  or  other 
device  charge,  demand,  collect,  or  receive  from 
any  person  or  persons  a  greater  or  less  compen- 
sation for  any  service  rendered,  or  to  be  rendered, 
in  the  transportation  of  passengers  or  property, 
subject  to  the  provisions  of  the  Act,  than  it 
charges,  demands,  collects  or  receives  from  any 
other  person  or  persons  for  doing  him  or  them  a 
like  and  contemporaneous  service  in  the  trans- 
portation of  a  like  kind  of  traffic  under  substan- 
tially similar  circumstances  and  conditions,  such 
common  carrier  shall  be  deemed  guilty  of  unjust 
discriminations,  which  is  thereby  prohibited  and 
declared  to  be  unlawful." 

Before  the  Hepburn  bill  became  a  law  few, 
if  any,  railroad  officials  apparently  discovered 
that  the  natural  consequence  of  carrying  out 
this  provision  of  the  Act  meant  that,  by  having 
a  uniformity  of  rates  on  each  railroad  system, 
a  standardization  of  railroad  operations  must 
develop,  and,  as  far  as  I  know,  this  has  never 


24 


been  suggested  in  any  newspaper.  Further, 
the  result  of  this  provision  of  the  Act  will  neces- 
sarily be  that  discriminations  in  rates  must  now 
be  considered  in  a  broad  sense,  and  uot  be  con- 
fined to  competitive  localities,  so  that  shippers 
will  be  able  to  send  their  goods  to  the  best 
market,  wherever  it  may  be. 

In  considering  this  provision  of  the  Act,  we 
must  not  forget  that  our  great  railroad  systems 
are  made  up  of  many  separate  companies,  each 
company  with  its  own  plan  of  making  rates 
and  that  the  rates  on  the  small  railroad  lines 
were  frequently  higher  than  rates  would  have 
been  if  these  smaller  corporations  had  been  a 
part  of  some  large  railroad  system.  When  these 
smaller  lines  were  consolidated  into  some  large 
system,  little  if  any  effort  was  made  to  reduce 
these  rates  to  conform  to  the  rates  of  the  larger 
system.  The  result  has  been  that  there  are  now 
inequalities  in  rates  on  nearly  every  railroad 
system  which  must  be  adjusted  by  the  Com- 
mission in  carrying  out  this  provision  of  the  Act, 
as  many  shippers  on  different  parts  of  the  same 
system  now  have  just  cause  for  complaint  when 
the  rates  which  they  are  charged,  are  compared 
with  the  rates  charged  other  shippers  on  other 


25 


parts  of  the  same  system.  For  example,  the 
rate  on  goods  shipped  from  A  to  C  may  be 
different  from  the  rate  on  goods  shipped  from 
B  to  C — ^A,  B,  and  C  being  shipping  points  on  the 
same  railroad  system  and  the  physical  conditions 
between  A  and  C  being  the  same  as  between  B 
and  C.  As  this  is  a  service  for  ^^a  like  kind  of 
traffic  under  substantially  similiar  circumstances 
and  conditions/'  such  discriminations  are  unlaw- 
ful under  this  section  of  the  Act.  Consequently, 
because  an  intelligent  comparison  of  the  detailed 
operations  in  the  carrying  of  freight  can  now  be 
made  by  examining  the  freight  tariffs,  it  is  in- 
evitable that  a  uniform  tariff  must  be  established 
on  each  road  for  freight  transportation  as  well 
as  for  passenger  service.  Further,  because  the 
uniform  system  of  book-keeping  to  be  adopted 
will  now  show  which  roads  are  able  to  carry 
freight  most  economically,  it  will  inevitably 
result  that  every  road  must  sooner  or  later  con- 
form to  the  standard  of  the  road  which  is 
operated  on  the  best  business  principles,  if  the 
industries  along  the  lines  of  those  roads  are  to 
be  maintained  against  the  competition  of  com- 
modities where  freight  rates  are  lower.  Further, 
these  inequalities  must  also  be  adjusted  before 


26 


the  Commission  can  attempt  to  formulate  any 
general  scheme  for  regulating  the  rates  of  any 
railroad  system  as  a  whole. 

This  underlying  principle  of  a  uniform  tariff 
has  now  become  apparent  to  such  of  our  legis- 
lators as  are  familiar  with  the  Hepburn  law, 
and  with  this  idea  in  view  certain  bills  were 
introduced  in  our  last  Congress  which  had  for 
their  object  the  enactment  by  law  of  uniform 
passenger  rates  in  order  to  minimize  the  necessity, 
of  future  legislation,  either  State  or  National, 
in  reference  to  the  passenger  service. 

As  both  passenger  and  freight  rates  are  now 
crystallizing  into  standard  tariffs,  it  has  become 
important  for  the  railroads  to  know  what  stand- 
ard the  Interstate  Commerce  Commission  will 
adopt  in  order  that  they  can  apply  this  stand- 
ard to  their  own  roads,  even  though  no  com- 
plaint has  been  made  that  unreasonable  rates 
are  being  charged.  The  attitude  of  the  Com- 
mission, therefore,  is  of  the  utmost  importance 
to  the  railroads,  and  a  correct  tabulation  of 
the  Commission's  statistical  tables  is  of  as  much 
importance  to  them  for  the  reason  that  i^pon 
these  publications  the  Commission  must  base 
the  standard  which  it  adopts. 


27 


Since  the  Hepburn  bill  has  become  a  law,  many 
of  our  large  railroad  systems  have  recognized 
this  underlying  principle  of  the  standardization 
of  railroad  operations,  and  in  their  passenger 
service  have  made  their  passenger  tariffs  on  a 
two  cent  per  mile  basis.  Of  course,  this  two 
cent  flat  rate  would  be  too  low  to  adopt  at  this 
time  in  many  instances,  but  the  principle  of 
uniformity  should  be  established,  whatever  the 
rate  per  mile  may  be  made,  and,  as  uniformity 
is  the  first  step  to  be  taken  in  solving  the  problem 
of  the  regulation  of  rates,  many  of  our  railroads 
are  trying  to  bring  it  about  as  quickly  as  is  con- 
sistent with  good  business  judgment. 

Publicity  of  Railroad  Management. 

As  the  predominating  feature  of  the  Hepburn 
law  is  that  all  railroad  operations  are  to  be 
given  the  greatest  publicity,  the  Interstate  Com- 
merce Commission,  in  addition  to  prescribing  the 
form  of  books  which  the  railroads  shall  keep, 
has  been  given  the  right  to  call  for  special 
reports  from  the  railroads  at  any  time,  so  that 
not  only  the  shipper  and  the  investing  public, 
but  our  bankers  and  brokers,  can  know  to  what 


28 


extent  the  bonds,  stocks,  and  rates  are  being 
manipulated,  and  this  means  that  the  Commis- 
sion, by  publishing  these  reports,  can  nip  in  the 
bud  any  bond  or  stock  manipulation.  Further,  it 
has  also  been  given  the  right  to  require  any  rail- 
road to  file  monthly  report  of  its  earnings  and 
expenses,  and  this  means  that  investors  in  stocks 
and  bonds  and  our  stockbrokers,  having  now  up- 
to-date  figures  to  judge  from,  can  easily  deter- 
mine what  railroad  securities  to  invest  in,  and 
the  shipper  or  any  other  one  interested  what 
rates  he  ought  to  pay. 

The  result  is  that  the  railroads  will  no  longer 
be  able  to  pad  accounts  or  conceal  items  if  the 
law  is  enforced.  This  publicity  not  only  in  rates, 
but  in  accounts,  payments,  contracts,  and  ad- 
ministration, lays  bare  the  entire  railroad  situa- 
tion as  never  before.  What  has  heretofore  been 
dragged  out  by  special  investigation  can  now  be 
ascertained  as  easily  as  the  assessed  valuation  of 
a  piece  of  real  estate.  It  is  this  publicity  which 
will  force  railroad  officials  to  operate  their  roads 
on  business  principles  even  more  than  the  man- 
datory provision  of  the  Hepburn  law  itself,  and 
such  publicity  the  smallest  shipper  is  as  much  in- 
terested in  as  some  large  shipper  who  has  his  own 


29 


cars  or  some  large  banking  and  stock  brokerage 
house  which  purchases  large  blocks  of  railroad  se- 
curities. Further,  a  broad  discussion  of  railroad 
management,  at  any  time,  can  produce  no  detri- 
mental results,  and  at  the  present  time  a  free 
and  open  discussion  of  the  subject  on  broad  lines 
would  tend  to  adjust  the  present  unsettled  con- 
ditions and  would  bring  about  more  stability  of 
railroad  operations.  In  fact,  a  discussion  of  this 
question  will  continue  until  all  the  interested 
parties  are  in  accord  as  to  the  policy  to  be  car- 
ried out  or  until  the  Interstate  Commerce  Com- 
mission, which  has  been  given  power  by  Congress 
to  control  the  situation,  defines  its  position. 

Special  Features  of  the   Law  which 
apply  to  the  shipper. 

Some  of  the  provisions  of  the  law  particularly 
affect  the  shipper  yet,  because  the  interests  of 
the  railroads,  the  bankers,  the  shippers,  and  the 
public  are  closely  linked  together,  any  decision 
of  the  Interstate  Commerce  Commission  may 
affect  them  all,  even  in  those  provisions  of  the 
law  which  only  directly  apply  to  the  shipper. 
For  example,  when  goods  are  shipped  over  more 


30 


than  one  route,  if  the  carriers  fail  to  agree  upon 
the  division  of  the  through  rate,  the  Commission 
can  prescribe  what  will  be  a  just  and  reasonable 
proportion  of  the  through  rate  for  the  different 
carriers  to  charge.  Further,  when  transporta- 
tion is  over  more  than  one  route,  the  Commis- 
sion can  prescribe  the  route  over  which  the  com- 
modities shall  be  taken  and  what  the  through 
rate  shall  be.  Further,  the  Commission  can  in- 
sist that  there  shall  be  a  continuous  carriage  of 
freight  from  place  of  shipment  to  place  of  desti- 
nation without  unnecessary  brea'k  of  bulk,  stop- 
page, or  interruption.  Further,  when  any  ser- 
vice is  rendered  by  the  owner  of  the  property 
which  is  being  shipped,  the  Commission  can  de- 
termine what  is  a  just  and  reasonable  charge 
for  such  service,  and  this  means  that  favored 
shippers  can  no  longer  be  given  an  indirect 
form  of  rebate.  Further,  the  railroads  must 
furnish  the  necessary  cars  and  facilities  for  trans- 
porting the  goods  of  a  shipper  without  discrim- 
ination in  favor  of  or  against  any  shipper.  Fur- 
ther, a  railroad  cannot  transport  any  article 
which.it  itself  produces,  mines,  or  manufactures. 
In  other  words,  no  common  carrier  can  now  en- 
gage in  any  other  occupation  than  transportation, 


31 


— a  fault  which  has  been  often  pointed  out,  but 
never  remedied.  Further,  all  switches,  spurs, 
and  side-tracks  used  in  the  transportation  of 
persons  or  property  are  now  subject  to  the  law, 
and  a  siding  cannot  be  given  to  one  man  and  re- 
fused to  another.  Further,  rate  wars  will  now  be 
entered  into  with  caution,  if  at  all,  because  every 
railroad  official  will  hesitate  to  lower  the  rates 
below  what  is  fair  and  reasonable,  knowing  that, 
if  he  attempts  to  raise  them  later,  the  Interstate 
Commerce  Commission  may  properly  ask,  "Why, 
if  you  were  able  to  do  business  at  the  lower  rate, 
do  you  now  askjto  increase  your  rates''?  In 
other  words,  the  Hepburn  law  checkmates  him. 
All  private  car  contracts  can  now  be  known 
to  the  public,  and  this  means  that  large  shippers 
can  no  longer  be  given  an  indirect  form  of  rebate 
by  means  of  special  contracts.  All  pipe  lines 
must  now  publish  their  rates,  and  through  tariffs 
now  apply  to  these  lines  the  same  as  to  the 
railroads.  Steamship  companies  transporting 
passengers  or  goods  by  water  in  connection  with 
the  railroads  are  now  subject  to  the  law.  Any 
service  performed  in  connection  with  the  receipt, 
delivery,  transfer  in  transit  or  with  ventilation, 
refrigeration,  icing,  or  storing  in  warehouses  or 


32 


elevators,  is  now  subject  to  the  law.  There  will 
no  longer  be  any  midnight  tariffs  or  tariffs 
changed  for  a  few  hours  in  prder  to  give  favored 
shippers  the  opportunity  to  ship  their  goods  at 
low  rates,  and  all  tariffs  must  now  state  sepa- 
rately all  terminal  charges,  storage  charges,  icing 
charges,  and  such  other  charges  as  the  Commis- 
sion may  designate.  When  there  is  a  joint  tariff 
of  two  or  more  carriers,  the  rate  charged  by  each 
carrier  must  be  stated.  Express  companies  and 
sleeping  car  companies  are  now  obliged  to  file 
reports  and  keep  their  accounts  as  directed  by 
the  Commission.  Up  to  this-  time  very  little 
has  been  known  about  the  special  contracts 
which  these  companies  made  with  the  railroads, 
and  it  has  even  been  charged  that  they  have  en- 
joyed special  favors,  as  railroad  officials  are  fre- 
quently their  largest  stockholders. 


The  Law  from  the  Legislators'  Point 
OF  View. 

I^et  us  now  look  at  the  law  from  the  point  of 
view  of  our  State  or  National  legislators.  Be- 
cause of  the  uncertainty  which  now  exists  as 
to  the  full   purport  of   the  Hepburn  law,   and 


33 


because  of  the  distrust  which  the  public  has 
of  railroad  operations — which  has  been  brought 
about  by  railroad  manipulations — laws  are  apt 
to  be  passed  which  will  be  too  far  in  advance 
of  the  times,  and  to  control  the  management  of 
our  railroads  more  than  is  advisable.  The  leg- 
islatures of  twenty-eight  different  States  have 
already,  either  enacted  laws  or  have  measures 
pending,  which  will  largely  reduce  the  earnings 
of  certain  of  our  railroads  or  burden  them  with 
unnecessary  restrictions.  Nineteen  States  have 
already  passed  laws  reducing  rates,  and  in  sev- 
eral of  these  States  the  railroads  have  retaliated 
by  abandoning  all  new  construction,  cutting 
down  train  service,  and  eliminating  excursion 
rates.  State  legislation  in  reference  to  the  rail- 
road problem  is  at  present  inadvisable,  as  State 
authority  except  for  local  questions  should  only 
be  exercised  as  an  emergency  right,  and  should 
not  be  used  until  after  the  Federal  Government 
has  had  an  opportunity  to  '^make  good,"  or  has 
shown  that  the  Hepburn  law  is  inadequate  in 
giving  justice  either  to  the  public,  or  to  the 
railroads.  Further,  it  is  self-evident  that  the 
Interstate  Commerce  Commission  should  not  be 
hampered  by  State  laws  in  regulating  the  rates 


34 


of  this  country,  as  the  Commission  in  making 
fair  and  reasonable  rates  must  consider  the 
railroad  situation  as  a  whole,  and  not  as  it  exists 
in  the  different  States. 

The  standardization  of  our  railroads  is  now 
being  brought  about  by  the  Hepburn  law  in- 
stead of  by  State  laws,  and  to-day  any  legisla- 
tion in  reference  to  the  railroad  situation  should 
be  limited  to  such  general  legislation  as  will  be 
supplementary  to  making  this  Hepburn  law 
effective.  Even  Federal  laws,  introducing  new 
principles,  should  be  passed  with  caution,  in 
order  that  the  country  may  have  time  to  adjust 
itself  to  the  changed  conditions  under  the  Hep- 
burn law.  This  law  has  been  in  operation 
seven  months,  but  the  business  men  of  this 
country  are  just  awakening  to  the  real  situation, 
and,  consequently,  have  not  adjusted  their  busi- 
ness to  the  new  conditions.  Several  months 
more  must  elapse  before  there  is  a  feeling  of  con- 
fidence in  the  public  mind  that  the  people  of  this 
country  are  to  be  benefited  by  this  law, — a  period 
of  time  which  will  be  materially  shortened  if 
our  railroad  officials  and  our  business  men  will 
appreciate  that  there  is  now  a  mutuality  of 
interests  between  them  and  that  by  co-operation 


35 

they  can  solve  this  railroad  problem.  Already 
there  is  a  unanimity  of  opinion  on  the  part  of 
all  factors  interested,  that  they  should  work  in 
co-operation  with  the  government.  We  are  at 
present,  however,  handicapped,  as  we  are  still 
groping  about  in  the  dark  to  find  the  real  issues 
involved,  since  no  concrete  statements  have  yet 
been  made  of  the  conditions  to  be  remedied. 

In  considering  any  question  of  new  legislation, 
we  must  remember  that  the  development  of  the 
railroad  systems  of  this  country  has  differed 
from  the  development  of  the  railroads  of  Europe; 
that  in  Europe  commercial  centres  became  estab- 
lished before  the  railroads  were  built,  but  in  this 
country  the  railroads  were  built  first,  and  our 
commercial  centres  came  as  the  result  of  the 
development  of  our  railroads.  This  develop- 
ment of  our  railroads  and  then  of  our  commer- 
cial centres  has  been  going  on  until  we  have  now 
reached  the  period  when  our  larger  commercial 
centres  are  already  established,  and  when  any 
part  of  our  country  can  be  reached  by  our  rail- 
roads in  connection  with  our  electric  railway 
and  the  steamboat  service  of  our  coast  and  inland 
lakes  and  rivers.  The  construction  period  of 
railroad  building  is,  consequently,  now  a  thing 


36 


of  the  past,  and  during  the  last  few  years  rail- 
road financiering  has  been  in  the  general  develop- 
ment of  the  railroads  already  built  and  in  weld- 
ing together  by  re-organization  and  consolidation 
our  separate  railroad  corporations  into  large  rail- 
road systems.  Because  few  new  lines  have  been 
built  into  new  territory,  and  because  the  spirit 
of  speculation  which  went  with  the  construction 
period,  and  which  gave  enormous  profits,  is  now 
rapidly  disappearing,  the  railroad  business  of 
this  country  is  already  getting  upon  a  more 
substantial  business  basis  and  becoming  more 
standardized.  ♦ 

During  the  last  few  years,  nature  has  not 
been  niggardly,  and  an  overwhelming  impetus 
has  been  added  to  the  producing  power  of  this 
country  by  the  formation  of  our  large  indus- 
trial trusts,  which  has  given  us  a  period  of  pros- 
perity felt  by  every  citizen  of  the  land.  This 
has  brought  about  an  expansion  of  business 
which  our  great  railroad  captains  of  industry 
have  lacked  the  foresight  to  anticipate.  To  meet 
this  enormous  development  of  our  country,  there 
must  now  be  a  greater  consolidating  of  interests 
and  a  greater  community  of  operations  by  our 
railroads.     Already  an  appreciation  of  the  inter- 


37 


state  character  of  our  railroad  service  is  taking 
place, — the  Hepburn  bill  being  the  first  expres- 
sion toward  remedying  the  lack  of  any  general 
railroad  policy.  This  law  has  made  the  Inter- 
state Commerce  Commission  a  vast  clearing 
house,  and  the  inevitable  result  is  bound  to 
be  the  standardization  of  our  railroads,  physi- 
cally, in  legal  requirements,  and  with  more  econ- 
omy of  operating  forces.  Consequently,  the 
future  expansion  of  our  railroad  systems  will 
be  with  less  waste  of  resources.  Because  an 
effective  nationalizing  influence  has  been  lacking 
in  the  past,  our  railroads  have  developed  under 
uncertain  and  chaotic  conditions  and  various 
local  restrictions.  It  is  this  which  has  brought 
about  the  present  acute  railroad  situation  as 
expressed  on  the  stock  exchange  by  a  fluctuat- 
ing market. 

With  a  standard  of  operations  there  will 
be  fewer  protests  against  the  way  stocks  are 
being  manipulated  by  those  who  control  the 
roads.  Under  the  pressure  of  facts  many  of  the 
officials  of  our  larger  railroad  systems  are  now 
shrewdly  leading  public  opinion  instead  of  being 
led  by  it.  These  roads  have  already  taken  the 
first  step  in  the  regulation  of  rates  without  any 


38 


suggestion  from  the  Interstate  Commerce  Com- 
mission. By  doing  this,  they  have  shown  the 
wholesome  regard  which  they  have  for  the  Hep- 
burn law,  and,  when  the  first  step  is  taken  by 
any  railroad,  we  may  rest  assured  that,  at 
the  proper  time,  the  other  steps  will  be  taken 
which  will  give  to  the  shipper  whatever  rights 
and  privileges  belong  to  him. 

In  conclusion,  let  me  add  that  all  great  meas- 
ures like  the  Hepburn  law  must  have  enough 
time  to  be  understood  in  order  to  be  appre- 
ciated. We  must  keep  in  mind  that  we  are  not 
interested  in  past  conditions,  but  in  the  future 
welfare  of  this  country,  and  that  there  is  now  a 
starting-point  to  work  from,  for  every  railroad 
manager  and  every  banker,  broker,  shipper,  and 
investor.  If  we  do  this  it  will  do  more  to  re- 
estabhsh  confidence  in  railroad  management  and 
railroad  securities  than  we  can  do  by  any  other 
single  act. 

^     OF  THE 


UNIVERSITY 


THIS  ^ooKisvv^Jl^^ovi 

jn^  OF  25  CENTS 

«"-«-  ^^  t  ON  THE  DATE  ''"^^^THE  FOURTH 

DAY  AND  TO  S  •  ^^^^^^^^^^^^^^ 

OVERDUE. 

MAR  S8 


\Oec' 


